Know your investments

Generally, Value Research publication readers maintain a decent level of knowledge about their investment portfolios. Given the resources we offer, staying informed is almost a given. While they may lack detailed analytics, they possess a solid understanding of the essentials, such as the value of their investments and the performance of individual funds. However, this savviness among our readers is not typical and not reflective of the average mutual fund investor. The latter group tends to accumulate funds rather than invest with a strategy, often through no fault of their own. The term 'flying blind' refers to operating without a clear direction, which, in aviation, is manageable due to the availability of navigational instruments that pilots use to steer the aircraft even when visibility is zero. Investors don't have access to such instruments. Or perhaps they do, but more on that later. A big pile Some months ago, we surveyed the portfolio sizes (in terms of number of funds) of mutual fund investors and were shocked at the results. We discovered that the majority of investors held portfolios with over 10 funds, with 20-30 funds being fairly typical and portfolios exceeding 50 funds being uncommon yet not exceptional. Typically, those with fewer than 10 funds had

This article was originally published on December 06, 2023.